Markets Have Paused, Not Fallen – What Should You Do Now?

Dear Investor, Hope you’re doing well. As you may have observed, the equity markets over the past 1 year have been moving in a narrow range without significant upward movement. This phase is known as a time correction, and it’s quite different from a price correction. Instead of falling sharply, the market consolidates, often due to a mix of macroeconomic and sectoral factors. You can see data below.

Index	Market Top Level as on  26-Sep-24	Market Lowest Level as on 4-Mar-25	Current Level 04-Aug-2025	Correction from Peak	Recovery from Low
BSE Sensex	85,836	72,989	81,047	↓ 5.6%	↑ 11.0%
Nifty 50	26,216	22,082	24,722	↓ 5.7%	↑ 12.0%

 Why This Time Correction?

1. India-US Trade Uncertainty Ongoing trade talks between India and the US remain unresolved, especially around agriculture and dairy tariffs. With no interim deal before the August 1 deadline, investor sentiment is dampened. In contrast, the US-EU trade pact highlights India’s diplomatic hurdles.
2. Weak Q1 Earnings Kotak Mahindra Bank reported a 7.8% fall after lower profits and deteriorating asset quality, dragging the Nifty Bank index. Axis Bank’s earlier poor results add to concerns. Only select large-cap banks like ICICI and HDFC Bank show resilience.
3. IT Sector Slump TCS fell 1.7% after announcing a 2% global workforce cut. Other IT majors also dropped amid weak demand. Analysts warn of rising attrition and short-term execution risks. Midcap IT stocks still offer growth potential.
4. FII Outflows Continue FIIs sold ₹13,552 crore in equities last week, extending selling pressure. However, DIIs remain net buyers.

View on Equity Markets?

• Demographic Dividend: Young population, rising consumption, and increasing income levels.
• Economic Growth: Among the fastest-growing major economies with 6–7% GDP growth expected.
• Corporate Earnings: Profit-to-GDP ratio improving, driven by formalisation and better margins.
• Strong SIP Culture: Over ₹20,000 crore/month retail inflows provide market stability.
• Capex & Reform Boost: Government push in infrastructure, manufacturing, and digitalisation.
• Global Attention: India benefits from China+1, Make in India, and global capital reallocation.

What Should Investors Do? Time corrections are often not a sign of weakness, but rather a period where the market rests before the next leg up. This is the ideal time to:

• Continue or increase SIPs (you accumulate more units at stable prices).
• Review asset allocation to ensure diversification.
• Favorable opportunity to make a lump sum addition to your existing schemes.

If you’d like a quick review of your portfolio, I’d be happy to connect and guide you further.